California shoppers, tax offices stocking up in advance of Amazon tax collection

September 13, 2012

Amazon will begin collecting sales taxes on California purchases Saturday, Sept. 15. In advance of the deadline, online customers and tax offices are stocking up.

But they're shopping for different things.


Man shopping onlineOnline shoppers are looking to pick up products before the 7.25 percent state sales tax (plus up to 2 percent more depending on the buyer's location) is added to Golden State cyber purchases.

State tax officials, meanwhile, are looking to hire
nearly 100 new state auditors
, lawyers and other specialists to ensure everyone complies with the new online tax.

The state Board of Equalization expects to spend $10 million over the next three years on new online sales tax enforcement employees.

But that cost will be quickly covered, say state officials, thanks to the $300 million a year in sales tax that the online effort is expected to bring into the state treasury.

More than just Amazon affected: While the new tax law is referred to as the Amazon tax and around $85 million a year in tax revenue is expected to come from the online retail giant, it will apply to many more companies.

The law applies to out-of-state retailers that have sold more than $1
million to Californians in the past year and have had more than
$10,000 in sales referred by an in-state affiliate.

Of course, California already has a use tax. This is the equivalent of the state's sales tax and is due on items Californians buy elsewhere but use in the state.

But on the Left Coast as elsewhere, the use tax is hard to enforce and effectively useless.

Come Saturday, Sept. 15, that's no longer a problem for California sales tax collectors.

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Comments
  • Very nice write up!
    If there was ever a time for accounting students to move to the warm climate of California, this is it. There is an influx in tax regulation in California if you didn’t get the drift from the article.
    With Amazon doing so much more taxing, job openings are sure to follow. Not only is the field of accounting and taxation growing at an amazing rate, it’s proving recent grads immediate employment. At some point the tax buzz will dissipate from California leveling off hiring but their are tactics and strategies that you can utilize. Here is a resource link for recent accounting graduates discussing employment right out of school. Enjoy, http://www.cpaexam.com/graduates-with-accounting-degree-land-stable-job/
    Warmly,
    Grant Webb
    Bisk Education
    grant-webb@bisk.com

  • “We support public administration and local governments in driving profitable projects and working with our private partners.”
    http://b2gconsortium.com

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